Start-Ups

The Geography of New Firm Formation: Evidence From Independent Start-Ups and New Subsidiaries in the Netherlands

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Executive Summary

This paper investigates to what extent determinants of the rate of independent startups and the rate of new subsidiaries are different. Using a regional data base for the Netherlands. The authors investigate the impact of two types of agglomeration effects, localization and urbanization, while controlling for a range of economic variables. They find urbanization economies to be particularly important for the creation of new subsidiaries while localization economies are more important for the creation of independent new ventures. Finally, the effect of agglomeration variables is found to be stronger for manufacturing industries compared to services industries.

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